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M/S. N.R.Enterprise and Anr. v. Union of India and 4 Ors.

Gauhati HC18 Jun 2019WP(C)/2445/2019

Case brief

AI extract

What is this about?

Writ petition challenges ex-parte service tax recovery proceedings and bank account freezing due to alleged non-service of mandatory notices. Court set aside impugned order and quashed recovery instructions for lack of due process.

What did the court decide?

Impugned order No. V(15)17/ST/ADJ/NR/ACD/2017 dated 28.03.2018 set aside; consequential recovery order No. IV(16)285/RECO/ACD/DIB/19/717 dated 25.03.2019 quashed; petitioner ordered to appear on 28.06

M/S. N.R.Enterprise and Anr. Vs Union of India and 4 Ors. — GST and Indirect Tax | Gauhati HC (2019)

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GAHC010078542019

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

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Case No. : WP(C) 2445/2019

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1:M/S. N.R.ENTERPRISE AND ANR.

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A REGD. PARTNERSHIP FIRM HAVING ITS OFFICE AT BVFCL FACTORY ROAD, P.O. PARBATPUR, P.S. NAMRUP, DIST. DIBRUGARH, ASSAM, REP. BY ITS PARTNER SRI NIHAR UDDIN BHUYAN, THE RESPONDENT NO.2.

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2: NIHAR UDDIN BHUYAN S/O. LT. A.S. BHUYAN R/O. NAGADOLLONG NAMRUP P.O. PARBATPUR P.S. NAMRUP DIST. DIBRUGARH ASSAM

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VERSUS

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1:UNION OF INDIA AND 4 ORS.

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REP. BY THE MINISTRY OF FINANCE, DEPTT. OF REVENUE, NEW DELHI.

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2:THE COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX DIBRUGARH MILAN NAGAR LANE (F) P.O. C.R. BUILDING DIBRUGARH-786001.

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3:THE ASSTT. COMMISSIONER CENTRAL GOODS AND SERVICE TAX DIBRUGARH DIVISION-DIBRUGARH P.O. C.R. BUILDING DIST. DIBRUGARH ASSAM-786003.

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4:THE SUPERINTENDENT (RECOVERY)

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OFFICE OF THE ASSTT. COMMISSIONER OF CENTRAL GOODS AND

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SERVICE TAX DIBRUGARH DIVISION DIBRUGARH P.O. C.R. BUILDING DIST. DIBRUGARH ASSAM-786003.

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5:THE CHIEF MANAGER STATE BANK OF INDIA NAMRUP BRANCH P.O. PARBATPUR P.S. NAKRUP DIST. DIBRUGARH ASSAM-786623

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Advocate for the Petitioner : MR. A K GUPTA Advocate for the Respondent : ASSTT.S.G.I.

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BEFORE

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HON' BLE MR. JUSTICE MANASH RANJAN PATHAK

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ORDER

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Date : 18-06-2019

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Heard Mr. R S Mishra, learned counsel for the petitioners and Mr. S C Keyal, learned Assistant S.G.I. for the respondent Nos. 1 to 4.

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Petitioner No. 1 is a registered partnership firm having its office at BVFCL Factory Road at Parbatpur, District-Dibrugarh, Assam represented by the petitioner No. 2, managing partner of the said firm and engaged in executing petty contracts primarily Works Contract, Manpower Supply with Public Sector Undertaking and others.

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The respondent No. 3 initiated a proceeding against the petitioner, which proceeded ex-parte pertaining to default of payment of Rs. 83,45,044/- under the provisions of the Central Excise Act, 1994 and on 28.03.2018, the respondent No. 3 passed the ex-parte order against the petitioner vide No. V(15)17/ST/ ADJ/NR/ACD/2017, which was forwarded to the petitioner firm by speed post. As the petitioner firm did not deposit the said assessed amount, the Recovery Officer, respondent No. 4 serving under the respondent No. 3, on 25.03.2019 vide No. IV(16)285/RECO/ACD/DIB/19/717 communicated to the Chief Manager of the State Bank of India, Namrup Branch, Parbatpur, DistrictDibrugarh directing the said authority to debit or freeze the account of the petitioner and to pay the

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said sum of Rs. 83,45,044/- along with the interest to the Government forthwith or upon the money becoming due or being held in compliance of the provisions contained in Clause(C) (i) of Sub-Section (1) of Section 79 of the CGST Act, 2017 read with Section 142(8)(a) of the CGST, Act, 2017.

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The petitioner on coming to know about the same, preferred this writ petition stating that no notice upon the petitioner firm has ever been served by the respondents before initiating the said proceeding against it.

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By an affidavit filed by the respondents on 21.05.2019, it is placed before the Court that on 13.09.2018, the respondent authorities communicated the petitioner firm requesting it to pay its arrear service tax amounting to Rs.41,72,522/- with penalty of Rs.41,72,522/- arising out of Order-inOriginal No.21/ST/ADJ/ACD/17-18 dated 02.04.2018 and because of such non-compliance of the assessee, i.e., the petitioner firm, the respondent department wrote a letter to the concerned bank on 25.03.2019 to freeze the account of the assessee, i.e., the petitioner firm in accordance with law and that in pursuance of the order of this Court dated 10.04.2019 passed in the present proceeding, status-quo has been maintained and accordingly, the respondent informed the bank about the same, requesting not to transfer any amount from the bank account of the assessee/petitioner firm to the respondent department.

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In this regard, the respondents also submitted that on 22.11.2017, the respondent department issued a notice to the petitioner firm by speed post and it was confirmed through the Special Postmaster, Parbatpur that the said letter was returned with a remark, “Not known, Return to Sender on 27.11.2017”. Thereafter, the respondent authorities again on 02.02.2018 intimated the petitioner firm by speed post about the personal hearing of the matter and on enquiry, it was confirmed from the said Special Postmaster, Parbatpur Post Office that the said letter of the respondent department was delivered to the petitioner firm on 21.02.2018 through speed post.

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The respondents further submitted that after the order was passed on 28.03.2018 regarding the service tax amounting to Rs.41,72,522/- and penalty of Rs.41,72,522/-, the same was also communicated to the petitioner firm by speed post on 02.04.2018, which was delivered on 07.04.2018 as per the report of the Postmaster of the said Parbatpur Post Office.

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However, from the affidavit of the respondents, it can be seen that no such report regarding service of notice on the petitioner firm has been annexed with the affidavit and the statements made by the respondents with regard to such service of notice to the petitioner firm are also not from the

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records.

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Considering the entire aspect of the matter and on hearing the learned counsels for the parties, the Court is of the view that the notice under the Central Excise Act, 1994 as required, before determining the arrear service tax of the petitioner firm by the respondents, was not duly served upon it and accordingly, the said decision of the respondent authorities issued under No. V(15)17/ST/ADJ/NR/ACD/2017 dated 28.03.2018 is hereby set aside and quashed and the consequential orders requesting the authorities of the State Bank of India vide communication under No. IV(16)285/RECO/ACD/DIB/19/717 dated 25.03.2019 directing to debit or freeze the account of the petitioner firm for recovery of the said amount of Rs.83,45,044/- is also hereby quashed.

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Considering the above, as the petitioner has become aware about the proceeding that has been initiated against petitioner firm for recovery of arrear service tax from it, it is directed that the petitioner shall now appear before the Assistant Commissioner, Central Goods & Service Tax, Dibrugarh Division, Dibrugarh, respondent No. 3 on 28.06.2019 at 10.30 A.M. and in the event of such appearance of the petitioner before the respondent No. 3, the said authority shall serve notice of the proceeding initiated against the petitioner and shall proceed accordingly.

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However, it is made clear that on failure of the petitioner to appear before the said Assistant Commissioner, Central Goods & Service Tax, Dibrugarh Division, Dibrugarh, respondent No. 3, on the date fixed, i.e., on 28.06.2019, the said authority shall proceed against the petitioner in accordance with law.

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As this order has been passed in presence of the counsel for the petitioner, therefore, the Assistant Commissioner, Central Goods & Service Tax, Dibrugarh Division, Dibrugarh, respondent No. 3 need not issue any fresh notice to the petitioner.

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With the aforesaid observations and directions, this writ petition stands disposed of.

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JUDGE

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Comparing Assistant

M/S. N.R.Enterprise and Anr. v. Union of India and 4 Ors.

Case brief

What is this about?

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M/S. N.R.Enterprise and Anr. v. Union of India and 4 Ors.

Case brief

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